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from John Lloyd:

Germany’s renewed hegemony isn’t something Europe needs to fear

German Chancellor Merkel attends news conference in Berlin

She can’t help it. Angela Merkel, chancellor of Germany, is the most important leader in Europe. She tries to duck it by exhibiting a modest demeanor, presenting no charisma, no grand pronouncements, no apparent ambition to stamp her views on history. She just carries on.

Yet European leaders vie for her Mona Lisa smile (or is it a smile?). Are we comfortable with Merkel’s influence and power?

No other politician in Europe brings the gravitas she does to a meeting. No other European leader can be so definite about what Europe’s support – which has been expressed, if in varying degrees of intensity, by all member states of the European Union – amounts to as a whole. And her unrivalled, understated leadership in Europe will be again on display.

Merkel travels to Kiev, Ukraine’s capital, this weekend to meet with Petro Poroshenko, the country’s president, to show support and to offer counsel before his meeting early next week with Vladimir Putin in Minsk, Belarus. She met Poroshenko in Berlin before traveling to D-Day memorial celebrations in France in June, and once there, talked with Putin about the crisis in Ukraine. She’s the go-to woman.

from The Great Debate:

Putin’s anti-American rhetoric now persuades his harshest critics

People I know in Russia, members of the intelligentsia and professionals who have long been critical of President Vladimir Putin’s anti-Western stance, have suddenly turned into America-bashers. Many have been swept away by Putin’s arguments that the United States, not the Kremlin, is destabilizing Ukraine.

Since the current crisis broke in Ukraine over its efforts to side with the European Union rather than Russia, Putin has been at war with the United States. He seems intent on proving that a U.S.-centric world order is over and that Europe should decide on its own what its relations with Russia will be.

from MacroScope:

A turning point?

Emergencies Ministry members work at the site of a Malaysia Airlines Boeing 777 plane crash in the settlement of Grabovo in the Donetsk region

Could the shooting down of a Malaysia Airlines plane over Ukraine be a fundamental turning point in the crisis that has pitted Russia against the West? And if so which way – towards rapprochement or a further escalation?

Kiev accused militants fighting to unite eastern Ukraine with Russia of shooting down the Boeing 777 carrying nearly 300 people from Amsterdam to Kuala Lumpur with a Soviet-era ground-to-air missile. Leaders of rebels in the Donetsk People's Republic denied any involvement, although around the same time their military commander said his forces had downed a smaller Ukrainian transport plane.

from Ian Bremmer:

World Cup chants reveal true state of U.S.-German relations

 Germany's national soccer players acknowledge their fans after their win over the U.S. at the end of their 2014 World Cup Group G soccer match at the Pernambuco arena in Recife

As Germany basks in its World Cup victory, it’s easy to forget that one of the most telling geopolitical moments of the tournament came during the Germany-U.S. game. As American fans chanted “U-S-A! U-S-A! U-S-A!” the Germans countered with, “N-S-A! N-S-A! N-S-A!”

In the weeks since, relations have crumbled. After it learned that a German intelligence officer allegedly spied for the United States, Germany expelled the CIA station chief in Berlin -- a rare move by a close American ally.

from The Great Debate:

U.S. spying on Germany: Making enemies out of allies, and for what?

German Chancellor Merkel attends a session of Bundestag in Berlin

What were they thinking?

In the wake of last fall's revelation that the National Security Agency had wiretapped German Chancellor Angela Merkel's cell phone, the report of U.S. intelligence’s involvement in two other likely cases of spying on Germany is mind-boggling.

Now the story has taken a dramatic new turn, with Germany expelling the CIA chief of station in Berlin -- an almost unprecedented step by an ally. This unusual action reflects how seriously the Merkel government takes these spying allegations.

from MacroScope:

Balance tilted in Ukraine?

slaviansk.jpgUkrainian forces pushed pro-Russian rebels out of their stronghold of Slaviansk on Saturday. Its re-capture represents Kiev's most notable military victory in three months of fighting in which more than 200 Ukrainian troops have been killed as well as hundreds of civilians and rebels.

The regions of Donetsk and Luhansk are likely to be next in the government forces’ crosshairs.

from Anatole Kaletsky:

How EU politics pushed Merkel to lift Germany’s austerity policies

German Chancellor Merkel and Luxembourg's Prime Minister Juncker hold a joint news conference after a meeting in Luxembourg

Matteo Renzi, the prime minister of Italy who took the revolving presidency of the European Union this week, seems to be the sort of man that Napoleon was referring to when he reputedly said that the key qualification he sought in recruiting a general was good luck.

Renzi become prime minister without even needing to win an election because Silvio Berlusconi and all other rivals self-destructed. He took power just after Italy passed the lowest ebb of its economic fortunes. In May, he was rewarded for his good fortune by Italy’s voters, who anointed him with a strong democratic mandate in the same European elections that discredited almost all Europe’s other national leaders. Now he is taking the helm in Europe, as an economic recovery is starting and the European Central Bank is swinging decisively in support of growth.

from MacroScope:

The Mark and George show

The Mansion House dinner in the City of London is one of Britain’s big set-pieces of the year featuring speeches by Bank of England Governor Mark Carney and finance minister George Osborne.

Carney will be speaking a week before the Bank’s Financial Policy Committee meets and is expected to road test its new tools to calm the housing market. Among other measures, the BoE could recommend caps on the size of home loans granted in relation to a property’s value or a borrower’s salary.

from MacroScope:

EU’s top two — oh to be a fly on the wall

Who are the two most important people in the EU? It’s hard to argue against Angela Merkel and Mario Draghi and they meet today in Berlin.

It’s supposed to be a private meeting but of course we’ll be digging, particularly for any signs that the German leader is for or against the European Central Bank printing money if it is required to beat back deflation.

from MacroScope:

ECB aftermath; how firm is opposition to QE?

After the European Central Bank opened its toolbox and deployed pretty much everything it had left, bar printing money, the question is if and when QE becomes a live possibility.

ECB chief Mario Draghi pointedly said at his monthly news conference that all policy options had not been exhausted.
German resistance to such a move will remain, however, and Draghi’s deputy, Vitor Constancio, has already intimated that it will take until late this year to judge whether the latest gambits have made a difference before moving onto the next stage.

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